When looking at pricing models across multiple managed service providers (MSPs), you may be conflicted about the best route to take. Most MSPs offer per-user and per-device pricing at least, depending on the business requirements. These pricing models are a continuously debated topic within MSPs. Given the shift from break and fix managed IT services, pricing models have become more complicated and varied within the past few years. While there are many pricing models available, this article will focus on the challenges of per-device pricing.
What Is Per Device Pricing?
The per-device model is rather simple, which makes it an appealing pricing type for MSPs. The idea is to use a flat fee for each supported device type within the customer environment. This makes it easy to illustrate costs and provide a quote to potential consumers. The MSP can easily modify the service fees as customers add more devices.
Since per device pricing takes on an a la carte perspective, companies with some internal IT support and want to protect further executives’ devices will find per device pricing attractive. Some companies may also want this model to internally manage parts of the IT but pay for a company to manage servers or create downtime prevention measures.
Why Per Device Pricing Is Painful
As bring-your-own-device (BYOD) policies are being added, the per-device pricing model becomes a major pain point since they will require service levels and may not fall under certain provisions from the MSP.
Difficult to Get the Pricing Exact
Another major pain point is it can be difficult to get the pricing correct. For instance, workstations and servers are configured differently, so some require more support than others, making it difficult to adjust for different devices with different service levels.
Employee Computer Literacy
Companies with many technically challenged employees will have to sign up for a higher level of managed service than those with more technically savvy employees. This will especially be if you do not have an in-house IT team that can assist with device questions and problems.
One of the greatest issues with this model is that if your company hosts a large amount of equipment, the pricing can quickly add up. Remember, a single company tablet or phone counts as a piece of equipment along with all the copiers, computers, and desktop printers.
Large Companies Can Burden the Support Team
Following along the lines of companies with equipment challenges, larger organizations with many employees using multiple devices can be costly and overburden the support team. MSPs are working with multiple clients, so even the largest can become overburdened by managing every single device for a large corporation.
Different equipment types require different services, so having various services for different hardware can become expensive and logistically challenging. This is where per-user pricing shines since different employee levels can dictate the services required.
This pricing model does not address multiple users on the same device, so the per-user cost is likely much higher. Therefore, if several technical knowledge users utilize the same equipment, then the price could be higher because of the user with the lowest technological knowledge.
Price Over Value
The cost-benefit analysis shows that the pricing of each device outweighs the value provided by the MSP. As mentioned, if it is only a few executive devices that need to be managed, then pay per device is usually the best approach. On the other hand, for numerous types of equipment, the pricing will overshadow the support value.
Some devices are more vulnerable than others and therefore require more support. Before choosing a per-device pricing model, it is important to determine the pricing for a worst-case scenario. Regardless of the multiple headaches caused by the per-device pricing model, it has its place in the MSP offerings. For your company, the best pricing model depends on the market, the number of devices, the technical savviness of your employees, the number of internal IT staff, and the required services. Each of these factors continues to change as your business expands. In many instances, it could be a combination of multiple components. What is most important is that you choose the pricing model that delivers your best chance of succeeding.